Voya 2013 Annual Report Download - page 250

ING U.S., Inc.
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
in trust. The embedded derivative within the coinsurance with funds withheld arrangement is included in Funds
held under reinsurance arrangements on the Consolidated Balance Sheets, and changes in the fair value of the
embedded derivative are recorded in Policyholder benefits in the Consolidated Statements of Operations.
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, amounts due from banks and other highly liquid investments,
such as money market instruments and debt instruments with maturities of three months or less at the time of
purchase. Cash and cash equivalents are stated at fair value. Cash and cash equivalents of VIEs and VOEs are not
available for general use by the Company.
Property and Equipment
Property and equipment are carried at cost, less accumulated depreciation and included in Other assets on the
Consolidated Balance Sheets. Expenditures for replacements and major improvements are capitalized;
maintenance and repair expenditures are expensed as incurred. Depreciation on property and equipment is
provided on a straight-line basis over the estimated useful lives of the assets, with the exception of land and
artwork which are not depreciated, as follows:
Estimated Useful Lives
Buildings 40 years
Furniture and fixtures 5 years
Leasehold improvements 10 years, or the life of the lease, whichever is shorter
Equipment 3 years
As of December 31, 2013 and 2012, total cost basis was $451.5 and $463.5, respectively. As of December 31,
2013 and 2012, total accumulated depreciation was $313.0 and $305.1, respectively. For the years ended
December 31, 2013, 2012 and 2011, depreciation expense was $33.7, $36.9 and $36.2, respectively, and included
in Operating expenses in the Consolidated Statements of Operations.
Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles
DAC represents policy acquisition costs that have been capitalized and are subject to amortization and interest.
Capitalized costs include incremental, direct costs of contract acquisition and certain costs related directly to
successful acquisition activities. Such costs consist principally of commissions, underwriting, sales and contract
issuance and processing expenses directly related to the successful acquisition of new and renewal business.
Indirect or unsuccessful acquisition costs, maintenance, product development and overhead expenses are charged
to expense as incurred. VOBA represents the outstanding value of in force business acquired and is subject to
amortization and interest. The value is based on the present value of estimated net cash flows embedded in the
insurance contracts at the time of the acquisition and increased for subsequent deferrable expenses on purchased
policies.
Collectively, we refer to DAC, VOBA, deferred sales inducements (“DSI”) and unearned revenue (“URR”) as
“DAC/VOBA and other intangibles”. (See respective DSI and URR sections below.)
Amortization Methodologies
The Company amortizes DAC and VOBA related to certain traditional life insurance contracts and certain
accident and health insurance contracts over the premium payment period in proportion to the present value of
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